123 Up And Adam’s Audit committee is now the Audit committee and the members may still want to stop over to this link: http://www.fasb.org/home
123 Up And Adam, Inc
The Audit committee shall be incorporated into 123 Up And Adam as a way for the organization to provide financial oversight. Task shall include budgeting and financial planning, financial reporting, and the creation and monitoring of internal controls and accountability policies. Below you will find some responsibilities of the committee but, not limited to.
Budgeting and Financial Planning
- The committee shall develop an annual operating budget.
- Vote on the budget within the finance committee.
- Monitor adherence to the budget.
- Set long-range financial goals along with funding strategies to achieve them.
- Develop multi-year operating budgets that integrate strategic plan objectives and initiatives.
- Present all financial goals and proposals to the board of directors for approval.
The Audit committee shall engage in an annualized budgeting process in cooperation with the Organization’s administrative staff.
- The new committee shall and is given permission (within 123 Up And Adam’s By-Laws) to include non-board members with financial expertise on the committee.
- The committee shall set long-term financial goals. (e.g) creation of a working capital or cash reserve fund and the creation of a fund for maintaining or replacing equipment.
- The Audit committee will work closely with our Strategic planning committee to determine the financial implications of the plan and will plot them into a multi-year organizational budget that will financially support the implementation of the strategies.
- The committee shall Develop useful and readable report formats.
- Develop a list of desired reports noting the level of detail, frequency, deadlines, and recipients of these reports.
- Work with staff to understand the implications of the reports.
- Present the financial reports to the full board.
The Audit committees will require the staff to provide highly contextual reports clearly communicating the organization’s financial and cash position, its adherence to the budget, its allocation of resources toward the accomplishment of our mission, and its support of any donor-imposed restrictions on contributions.
Having a predetermined list of reporting expectations permits staff to allocate enough time to produce accurate, high-quality reports and not be caught off guard by ad hoc requests. In addition, these reports should help to focus the board’s discussion about expected outcomes and potential strategies for overcoming setbacks or changes in the financial environment.
Internal Controls and Accountability Policies
- The committee shall create, approve, and update policies that help ensure 123 Up And Adam, Inc’s assets are protected.
- Ensure policies and procedures for financial transactions are documented in a manual, and the manual is reviewed annually, and updated as necessary.
- Ensure approved financial policies and procedures are being followed.
123 Up And Adam, Inc’s Audit committee shall be diligent in its fiduciary responsibility it serves a leadership role in this area, making sure appropriate internal control procedures for all financial transactions are documented.
The committee should also play a role in determining and updating bank account signatories as well as overseeing all legal and governmental filing deadlines are met.
The Audit committee shall also, ensure that other policies it may develop will be in compliance with Fed, State, and Local laws, that protect 123 Up And Adam, Inc and manage its exposure to risk. The committee will accomplish this by establishing policies surrounding:
- The organization’s Personnel policies
- Long-term contracts or leases
- Loans or lines of credit
- Internet use and computer security
- Capital purchases
- Disposition of donated stock
- Insurance requirements and reviews
- Record retention
- Gift acceptance
Audits and Investments
As 123 Up And Adam, Inc is very small we have decided that the finance committee now perform the role of the audit committee. The committees may become separate as the organization grows.The basic Responsibilities of an audit committee include:
- Recruit and select the auditor.
- Review the draft audit and 990 as presented by the auditor.
- Present the audit report to the full board of directors (if the auditor does not do this).
- Review the management recommendation letter (SAS112) from the auditor and ensure follow up on any issues mentioned.
- Draft an investment policy detailing the objectives of the investment portfolio, guidelines on the asset allocation of the portfolio based on a predetermined level of risk tolerance, authorizations for executing transactions, disposition of earned income, etc.
- Ensure provisions of the policy are followed.
- Review the policy at least annually and update if necessary.
- Hire and evaluate the investment managers/advisors.
We know that 123 Up And Adam does not have enough cash to support a full-blown investment portfolio, yet we should manage the organization’s cash to optimize earned revenue.
The board of Directors and Audit committee should consider drafting guidelines for putting the Organization’s excess cash in low–risk, short-term vehicles. These should be designed to maximize earned revenue from existing cash without interfering with operating cash flow needs, i.e., purchasing short-term CDs with staggered maturity dates, or establishing a sweep account arrangement wherein excess cash is swept into a higher-yield vehicle each night.
These types of policy’ s will need to be run past our Accountant.
The committee chair
123 Up And Adam, Inc’s board of Director has the pleasure of chairing this committee, whose duties are described in the bylaws. As chair of the Audit committee, the board treasurer makes sure the committee does its job. Specific duties of the chair include:
- Serving as the principal liaison between the committee and the full board,
- Working with the organization’s President to set an agenda for each committee meeting,
- Notifying members about the meeting,
- Ensuring handouts and reports are prepared and sent to committee members in advance.
- The committee shall create an annualized committee task list for organizing the committee’s work. This should take the form of a month-by-month timeline or calendar that integrates budgeting and financial planning deadlines, governmental and legal filing deadlines, internal report deadlines, dates to review and update policies and procedures, and dates of Audit committee meetings and full board meetings.
The treasurer or Audit committee chair shall have good judgment, logic, curiosity, and a commitment to accountability and to 123 Up And Adam, Inc’s mission, A commitment to seeing the organization fulfill its goals and objectives is what we are asking. The treasurer or finance committee chair should wish to develop, an understanding of nonprofit financial reporting and the IRS 990.
Are you thinking of being part of 123 Up And Adam’s Audit Committee please contact me at: